Avoid the energy price rise

Category:
Gas and electricity
06/09/2017

Autumn is beginning to make itself known, and so the challenge to not put the heating on for as long as possible has begun. However, it's also the time of year when a large number of energy tariffs are due to end, which could mean many people are automatically switched onto more expensive options, just as the peak season of energy usage kicks in.

Price rises of up to £409

According to data from energyhelpline, 42 dual fuel tariffs are scheduled to end on 30 September, compared with just 18 last September, highlighting a clear annual shift. Unfortunately, this could mean average price rises of up to 53% for customers being switched onto standard tariffs: Co-operative Energy's Fix for Longer September 2017 tariff has an average annual cost of just £770, yet their standard tariff clocks in at an average of £1,179, a whopping £409 (or 53%) more.

Then there's npower, which has got four tariffs ending this month, all of which will result in price rises of 47% or 48% to those who switch to the standard tariff, adding an extra £381-£385 to typical dual fuel bills (to £1,187 on average). Lesser-known PFP Energy has no less than 10 tariffs set to end this month, resulting in price rises of between £226 and £331, to an average standard rate of £1,058.

However, that annual cost is still far lower than some of the main suppliers, showing that it's often the case that the smaller suppliers have the smallest prices. Flow Energy is another example – it's got three tariffs ending this month, yet switching to a standard tariff will only add between 13% and 26% to typical bills, and even then, the average annual cost of a standard tariff clocks in at less than £1,000 (or £949 to be exact).

But why are so many tariffs ending anyway? Mark Todd, founder of energyhelpline, explained that suppliers offered "an unusually large number of tariffs" last year as wholesale costs were so low, "but a year later, those tariffs are coming to an end, [and] customers will automatically be moved on to the more expensive standard rates.

"The potential increases could go up to an eye-watering £409 annually, making it worth the effort of spending a few minutes switching to ensure you get the best new cheap deal to keep you saving."

Be like a millennial

Comparing energy tariffs and switching to a cheaper deal is the only way to beat the price rises, yet not everyone seems to spend the time on such matters – but millennials appear to be bucking the trend.

A study from finder.com has revealed that the millennial generation is most likely to switch energy provider, with 32% of this age group doing so in the last 12 months. Conversely, Baby Boomers are most likely to stick with the familiar, with 26.4% remaining loyal to their current provider for more than a decade, compared with one in five across all age groups.

The lack of switching could be driven by the fact that over two in five of those surveyed didn't know or understand their energy tariff options, yet with so many tariffs coming to an end – and several suppliers having already implemented price rises this year, not to mention British Gas's scheduled price hike of 12.5% later this month – it's time to start being proactive.

"It's great to see that millennials are taking more control over their energy costs," said Jon Ostler, CEO (UK) at finder.com. "As a generation of digital natives it's not surprising that they're more comfortable with exploring their options and switching online, however it's alarming that almost half of Brits don't know or understand their energy tariff options, which could be costing them hundreds of pounds a year.

"It's important to continue to compare what's out there ahead of price hikes. As it's such a highly competitive market, if you haven't changed suppliers recently, or even if you have without doing your research, you could be missing out on an opportunity to stretch your pound further."

Switching to a new energy supplier has the potential to save you hundreds of pounds a year, and at the very least will ensure you're not hit with a £409 price rise. Start by using our energy comparison tool to see the kind of deals available in your area, and see how much you can save.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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